Nov 4, 2009, 14:24 GMT
Warsaw - Changes in Poland's retirement system, including lowered payments to private pension funds, could take effect in July 2010, Finance Minister Jacek Rostowski said Wednesday.
Poland would see a reduction in its deficit by lowering payments to private pension funds while keeping that money in the state's social insurance company ZUS, Rostowski told the daily Wyborcza.
Because of the changes, 'future pensions will surely be higher,' Labour Minister Jolanta Fedak told reporters in Warsaw. Fedak added that the changes were aimed at raising future pensions and lowering costs of running the country's retirement system.
Under the proposal, private pension funds would receive some 3 per cent of worker salaries instead of the current 7.3 per cent, a change amounting to a difference of some 13 billion zloty annually (4.4 billion dollars).
The state would gain, Rostowski told Wyborcza daily, because it will not have to fall 'deeper into debt.'
Private pension funds under the proposal would get 9 billion zloty annually instead of 22 billion.
The proposal came in for immediate criticism.
The changes amounted to 'creative bookkeeping' that would undermine trust in the country's retirement system, Marek Gora of the Warsaw School of Economics told Wyborcza.
Smaller private pension funds could disappear from the market when their funds were reduced, Ewa Lewicka, head of the Chamber of Commerce of Retirement Associations, was quoted as saying.
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